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Contact the Author: accruedint at gmail.com

Saturday, June 15, 2013

Reuters
is reporting that Office Depot Inc (ODP)
investor Starboard Value LP has sued the second-largest U.S. office supply
retailer for not holding an annual shareholder meeting to elect directors.

Starboard Value filed the complaint
with the Court of Chancery in Delaware, where Office
Depot is incorporated.The
complaint states that the company had not held an annual shareholder meeting
for 13 months.

Starboard has nominated six people for
the 10-member Office Depot board. They cited the lack of experience among
current board members and stressed the need to reconstitute the board whether
or not its proposed merger with rival OfficeMax Inc (OMX)
goes through.

Office Depot announced in February plans to
buy OfficeMax in a deal worth $937.2 million. They have not yet decided on the
combined entity's name, headquarters or CEO.The companies are awaiting regulatory approval and will both hold
special shareholder meetings on July 10 to seek investor approval.

"The proposed merger provides no
basis for the company to deprive stockholders of their right to meet annually
to elect directors," Starboard said in the complaint.

Starboard said it was forced to take the
latest action as it did not expect directors to be elected at the special
meeting.Starboard said in its most
recent regulatory filing that it held about 42 million shares of Office Depot,
or about 15 percent of the company's stock.In addition to Office Depot, Starboard reported a position of almost 8
million shares in Compuware (CPWR), 12.5 million shares of Integrated Device Technology
(IDTI), 5.1 million shares of
Calgon (CCC), and
7.3 million shares Wausau Paper (WPP).

This lawsuit could potentially drive
down Office Depot’s stock price which is currently trading around $4.28.While that could be a good thing for
investors looking to initiate new positions it might not be the best thing for
the company considering the stock-for-stock merger deal with OfficeMax.

About Me

I oversee taxable bond trading for a small investment management firm. Opinions expressed on this website may not reflect the opinions of my employers. Strategies described here should not be taken as advice, and may not be the strategies being used for my clients. Take this website as the egotistical ramblings of a bond geek and nothing more. E-mail is accruedint *at* gmail.com or find on Facebook.